Policy clinic: International commuters

For a number of years, soaring house prices at home, the availability of cheap flights abroad and an increased focus on flexible working and work-life balance have tempted a considerable number of employees in the UK to relocate abroad – without leaving their jobs behind.

The appeal of a UK salary combined with a cheaper cost of living in a sun-soaked destination is clear, and the ability, through technological developments, to have a ‘portable office’ has fuelled the trend.

Faced with the advent of the ‘international commuter’, how should the forward-thinking employer be responding? It will, for example, have to consider that standard employment policies may need to be revised to ensure that organisations are prepared for employees whose commute crosses borders.

The international commuter can take many forms, including those who split their time between destinations, work remotely from home offices abroad, or commute into England on a regular or irregular basis. The issue of immigration controls and whether the employee is permitted to work in the intended manner needs to be addressed at the outset.

Careful assessment

Each situation will need to be carefully assessed to ensure that requisite procedures are followed and, if necessary, correct permits and visas are in place and that these arrangements are kept up to date if circumstances change. Employers must also make it clear that they may terminate employment if the legal requirements are no longer met.

The international commuter can pose a legal conundrum for employers. An employee living abroad who works both remotely from home and from their employer’s UK office can pose tricky questions about which law governs the contract, and which legal rights the employee enjoys – each situation needs to be considered individually.

It is helpful if policies and contracts state the law that applies to the employment contract, although some jurisdictions (including the UK) have mandatory rights that the employee can rely on even if the contract of employment is governed by the law of another country. This can have considerable impact upon the rights and responsibilities of employer and employee. If in doubt, seek legal advice.

Money, money, money

Tax, social security, exchange rates, pensions – the international commuter is a potential payroll nightmare. Policies and provisions governing financial matters should be drafted widely enough to take into account issues thrown up by international working arrangements.

Employers should reserve the right to take whatever steps may be necessary to ensure that tax, pensions and social security requirements are complied with in all relevant countries and make it clear that payments to employees will be made less applicable deductions.

Additionally, if the employer has provisions relating to exchange rates, they should be carefully drafted to ensure that they are detailed, clear, and take adequate account of the potential for currency fluctuations.

The benefit of benefits

For employers with a diverse workforce, at least some of whom spend time abroad, it may be appropriate for benefits packages to be tailored for individual employees. A flexible benefits package may particularly suit international commuter employees, who may not derive benefit from some UK-based entitlements.

Clear policy drafting is essential to make sure that benefit entitlements are clear and that the employer can amend or withdraw benefits as the circumstances change.

Some employers also fund travel expenses from employees’ homes to work – this could be hugely expensive if workforces include international commuters. Policies on travel costs may include loosely drafted provisions that could be interpreted as covering some or all of an international commuter’s travel expenses.

Employers should therefore ensure that policies and provisions relating to payment for travel are tightly drafted to preclude a situation where an employer may find itself contractually liable to cover costs of international commuting.

Likewise, general expense policies should be carefully reviewed. Employers need to set out clearly the parameters within which they will cover expenses. For example, if employees are permitted to work from homes abroad, who will fund the cost of employees’ international telephone calls for work purposes? Issues of exchange rates should also be addressed to avoid future disputes.

Many employers offer flexible working to all employees, too. This growing trend fits well with the lifestyle of the international commuter.

Policies facilitating flexible or remote working should detail the process through which employees should make requests. While some general provisions can also be included in a generic policy (for example, relating to provision of equipment for home use), it is probably best for individual arrangements to be detailed in separate updates to individual employees’ contracts.

Safe journeys

The international commuter lifestyle may sound glamorous, but the toll of frequent flying and lengthy commutes on physical and emotional health and family life, and issues of employee safety when working remotely, should not be overlooked.

Employers should review policies relating to health and safety and sickness, with the assistance of health and safety experts, to ensure they take account of the possibility that employees may be working, living and travelling abroad. Such policies could, for example, be expanded to provide for regular check-ups for such employees and risk assessments for workplaces outside the UK.

Consequently, policies should be drafted to take account of the increased risks to the employer’s confidential information arising from international commuting, and clearly expound what is required of employees in terms of data and information security, as well as the consequences of failure to comply with these guidelines.

International commuting might be a thing of the future but it may also become a thing of the past – environmental issues, health problems associated with frequent flying, oil price increases and aviation-related taxes may all jeopardise the practicability of the lifestyle.

Employers may be faced with valuable employees, who can no longer easily afford their commute, requesting more flexible working practices – or increased wages. Additionally, the effects on health and home-life may add to employees’ stress and detrimentally affect their health.

Maintaining a regular dialogue with international commuter employees will be very important, and ensuring there are policies and procedures to facilitate communication and support is an important aspect of this.

A happy employee is often a more productive employee – working with international commuters to make their chosen lifestyle work could therefore be a win-win for all.

Lisa Gillis, solicitor, employment team, Withers

Some Do’s and Don’ts of employing international commuters

DO consider the legality of arrangements, which country’s laws will govern the contract, and which legal rights employees will have.

DO check which country’s tax and social security arrangements are applicable – take local advice where necessary.

DO keep an eye on employees’ health and general wellbeing.

DO ensure sufficient supervision and support is in place for those working in more than one country.

DON’T make assumptions – take legal, financial and other professional advice as necessary to ensure that arrangements are legal and efficient.

DON’T forget about your internationally mobile workers. Keep in touch with them and review how the arrangement is working on a regular basis.

The mobility question

How much mobility can be built into a contract?

The place of work has to be notified in the written particulars, but it is also possible to include a mobility clause entitling the employer to move the employee to a different workplace.

Whenever the employer exercises the power to relocate an employee, it must act reasonably in the manner in which it seeks to exercise the mobility clause, otherwise it will be in breach of the implied duty of mutual trust and confidence. Employees whose contract stipulates that they may be required to work abroad can later refuse to go if they find they have to travel to an area where their life would be at risk.

Employees sent to work abroad for more than one month must be provided with additional information in their written particulars before they leave.